Who Next at the ECB Helm?

During the crisis, the ECB has had an outstanding president in the person of Jean-Claude Trichet. But his non-renewable term will end in October 2011, and the euro’s member countries are already bargaining over his successor.

TILBURG, THE NETHERLANDS – Two years ago, the leaders of the world’s central banks were considered heroes for their efforts in preventing financial crisis from turning into Great Depression II. Today, however, central banks are being sharply criticized, and their independence is coming under severe pressure in many countries, particularly in the eurozone, as Mario Draghi, the head of the Bank of Italy, recently pointed out.

The type of person at the helm of any central bank is always important – but now more than ever, because financial crises always threaten central banks’ independence.

In the United States, the Federal Reserve seems to have support only of the Obama administration, hardly something of which to be proud. Congress has disparaged the Fed’s handling of the crisis, and Representative Ron Paul of Texas, who believes that the Fed’s very existence is unconstitutional, will take over one of the key congressional oversight committees in January. More than half of all Americans want politicians to have more say over monetary policy – a scary prospect in view of the historical record.

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